1. NEFE High School Financial Planning Program
Unit 1: Financial plan
NEFE High School Financial Planning Program

2. Most people don’t plan to fail… They simply fail to plan!”

3. Wants
Have your parents ever refused to buy you some things you really wanted?
New clothes
Tickets to a show
Latest electronics
Maybe you just didn’t have enough money to buy these items yourself

4. Sample Wants and Needs WANTS NEEDS Food for breakfast An iPod
Video game
Cell phone
Hot car
A mansion
______________
NEEDS
Food for breakfast
Clothes for school
Transportation to school or work
A place to live
______________

5. What Are Your Goals?
Make a list of all the goals you have for yourself – you have one minute
Narrow this list down to six goals – you have 45 seconds
Now pick your top three goals – you have 20 seconds
Last time, pick your number one, top goal – you have 10 seconds

6. Financial Planning A process of: Setting goals
Developing a plan to achieve your goals
Putting the plan in action
Creating a roadmap for everything you do with your money
Spending
Saving
Using Credit
Investing

7. Purpose of Financial Planning
To live comfortably
Buy things without getting stressed out
Things that you need
Things that you want

8. 5 Steps of Financial Planning
Set SMART Goals
Specific
Provide the details
Measurable
Put a price on it
Attainable
Within reach
Realistic
Practical
Time Bound
Clear time frame
Analyze information
Create a plan
Implement the plan
Monitor and modify the plan

9. Two Teen Millionaires Meet Cameron and Ashley
Two teens who set goals and made millions

10. Step 1: Set SMART Financial Goals
Begin with an end in mind
Visualize a picture of your desired outcome
Set priorities in order to make good choices
Should be meaningful
Write them down
Consider needs and wants
Needs
Basic things that we must have to survive
Wants
Things that make life more fun
Can live without them

11. SMART Goals Are your goals SMART? Realistic Attainable
I want to be a millionaire in two years
I want to lose ten pounds in a week
Attainable
Are these two goals attainable?
Can we reach these goals during our time frame?

12. Examples of SMART Goals
S - Specific
I want to go to Bermuda on vacation this summer
M – Measurable
I will need a total of $2,400
A – Attainable
I will need to save $400 a month for six months
R – Realistic
List how you can do this
I will cut back on going out to eat for lunch
I won’t go to the movies
I will save my birthday money
I will only buy gifts for my friends that are on sale

13. Examples of SMART Goals (continued)
R – NOT Realistic
I will save my entire paycheck each week
This means you will not pay your cellphone bill, your car insurance and you won’t buy gas for your car
This is NOT realistic
Your plan needs to be Realistic if it isn’t you won’t reach your goal
T – Time
I will need to save by July 2012 in order to plan for an August 1st trip

14. Step 1: Set SMART Financial Goals (Continued)
Needs and Wants are affected by your Values
Beliefs and practices in your life that are very important to you
Influenced by many factors such as family, friends, your way of life, education, and life experiences
Goal
Something that you aim for in your life and gives you direction—set financial goals
Time frames for goals:
Short-term: accomplish within 3 months
Intermediate: accomplish within 3 months to 1 year
Long-term: take longer than 1 year to accomplish
Delayed Gratification
Giving up something now to get something better later

15. Step 2: Analyze Your Information
Take a look at your Cash Flow
Amount you receive or earn
Money you get from allowance, a part-time job, a gift, etc.
Amount you are spending
Amount you are saving
Common dilemma
Need to save more than you receive or earn

16. Step 3: Create a Plan (Your Financial Roadmap)
Items that can affect your spending
Spending log
Values
Habits
Opinions of family and friends
Online activity
Advertisements

17. Are you an Oscar or a Felix?
It is said that we have both an Oscar and a Felix living inside our brains.
Oscar, similar to the Oscar in “The Odd Couple,” is “unstructured, reactive, driven by whims, and lives by the credo, ‘rules are made to be broken.’”
Felix, on the other hand, “loves lists, sets goals, and plans everything he does. He lives by the clock and never deviates from his rules.”
When it comes to working with numbers, who rules your brain — Oscar or Felix? Why?

18. Step 3: Create a Plan (Continued) (Your Financial Roadmap)
Six Steps in the Decision Making Process
Identify your Goal
Establish Criteria (helps to eliminate choices)
What?
When?
How much are you willing to spend?
Examine your Options
Brands, features, capabilities
Weigh the Pros & Cons
Match your options with your criteria
Make your Decision
Which option best meets your criteria?
Evaluate Results
Analyze and reflect

19. Key Terms Related to the Decision Making Process
Opportunity Cost
The value of what is given up when you select one option over another option
Satellite Decisions
Smaller decisions that can result from a major decision

20. Step 4: Implement the Plan
Be a responsible spender
Accountable for your decisions and actions
Guidelines for sticking with your plan
Write your goals on an index card
Post the card somewhere visible
Discuss your goals with someone
Prior to making a purchase, decide how much you are going to spend in advance so you do not spend more

21. Step 5: Monitor and Modify the Plan
Monitor your plan once or twice per month to stay on track
Make any necessary adjustments
Unexpected instances or expenses
Change in goals
Resources change
Life changes

22. Take the Time to Create
a Financial Plan